Tuesday, December 16, 2014

Hedge Funds Bullish on Gold

Hedge funds are the most bullish on gold since August, defying Goldman Sachs Group Inc.’s prediction that the rally in prices will fade.

The net-long position in New York futures and options climbed for a fourth week, the longest stretch of increases since July, government data show. Futures jumped 2.7 percent last week, the most since June, as a plunge in global equities erased about $2 trillion from the value of stocks.

Holdings in exchange-traded funds backed by gold rose for the first time since October as investors sought protection from the rout. While prices are heading for a second consecutive month of gains, Jeffrey Currie, Goldman’s head of commodity research, says bullion will drop as the U.S. economy improves.

“We are seeing safety trade toward gold,” Peter Sorrentino, a senior vice president who helps oversee $1.8 billion at Huntington Asset Advisors in Cincinnati, said Dec. 11. “Investors have begun to see that the equity market is priced for a scenario that may not come to pass. That’s led some to flee the market and use gold as a storehouse.”

via Bloomberg

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